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Targeted Allocation Money is great for MLS, but maybe not for domestic players

ISI Photos-Perry McIntyre

Increased funds are attracting more international talent, but some team officials are concerned about the effect on young domestic players.

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Major League Soccer is growing faster than ever, with the amount of money spent on rosters increasing just about every offseason. In December, the league took one of its biggest leaps yet, announcing that each team would be able to spend an additional $2.8 million in discretionary Targeted Allocation Money in 2018. That raised the total amount of TAM available to each team to $4 million for the season, effectively doubling the salary cap.

It’s the most significant infusion of cash into MLS since the league introduced the Designated Player rule way back when David Beckham joined the league in 2007, and it has already had a big impact. So far this winter, clubs have traded millions of dollars in TAM, spent it to bring 12 newcomers to the league and, perhaps most significantly, used it to buy down the contracts of 2017 Designated Players to make room for new DPs like Atlanta’s Argentine teenager Ezequiel Barco.

Targeted Allocation Money is undoubtedly raising the on-field quality of MLS, allowing teams to bring in dynamic new talent while keeping their existing cores largely intact. But it is also raising some serious questions, specifically about how MLS views itself and what role Americans and Canadians will play in the league’s future.

Does MLS want to raise its on-field quality as quickly as possible, no matter the nationalities of its players? Does it want to serve as an incubator for Americans and Canadians and commit to getting more of them on the field? Or is the league interested in finding a happy medium, perhaps by creating a structure that allows domestic talent to flourish while simultaneously attracting top international players?

As things stand, MLS is barreling towards that first option, a choice that, at least for the short-term, is in line with the league’s desire to become one of the best in the world. But a race to raise on-field quality will have side effects, one of which might be a reduced role for Americans and Canadians.

“If we inject $2.8 million in TAM, is the league going to get better? The answer is, unequivocally, yes,” said a club executive, one of more than a dozen front office members, coaches, scouts and agents – all of whom wished to remain anonymous – who spoke to FourFourTwo during the reporting of this story. “The other side of the debate is, did it punish Canadian and American players? That wasn’t the intent, but I think it has been a consequence.”

Understanding Targeted Allocation Money

By its very nature, TAM is designed to help teams sign players from outside MLS. According to the league’s roster rules, the money can only be used in four ways:

1) To sign a new player whose salary and acquisition costs are between the maximum budget charge ($504,375 in 2018) and $1.5 million

2) To buy a Designated Player below the max budget charge in order to free up space to simultaneously sign a new DP

3) To re-sign an existing player (who is already earning more than the maximum salary budget)

4) To help sign new Homegrown Players, though the amount of TAM that can be used in these deals is capped at $200,000.

The first two categories involve new players coming to MLS from outside the league. The third has been used only occasionally since TAM was introduced, while the fourth has yet to be put into practice. Combine all that with the fact that most of the players who move to MLS from outside the league aren’t American or Canadian, and it becomes clear that TAM has made the top part of rosters around MLS significantly more international.

That is consistent with the profile of players MLS teams are targeting with their TAM. Last season, MLS and teams combined announced that TAM had been used on 65 players. Of those players, 51 were internationals – defined in this article as players who aren’t eligible for the U.S. or Canadian national teams and mostly developed outside either country, regardless of whether they occupy an international spot on an MLS roster. Forty-four of those 51 were on their first MLS contracts.

Just 14 of the TAM players were developed in the U.S. or Canada, and only two of those – Atlanta’s Brad Guzan and Orlando’s Jonathan Spector – left foreign leagues to join MLS in 2017. The trend has been even more stark this offseason, as all 12 players signed with TAM are internationals.

Kevin Sousa-USA TODAY Sports

Kevin Sousa-USA TODAY Sports

A projection of 2018 opening day starting lineups for all 23 teams highlights the league’s increased reliance on  international players. The projection yielded an average of 6.57 international players per XI, which would be by far the highest total in the last five years. For context, that number was 5.68 on opening day 2017 and 5.3 in 2016. On opening day 2015, three months prior to the league’s initial introduction of TAM, MLS teams averaged 4.9 international starters, a number consistent with the opening day averages in 2014 and 2013.

The 2018 projection would put MLS roughly in line with the English Premier League, where foreign players had played 61.2 percent of available minutes from the start of their current season to the release of an October study by the International Center for Sports Studies Football Observatory. That number was third highest among European first divisions and part of a broader trend that has seen England manager Gareth Southgate call up several players unable to crack the lineup at their clubs.

MLS’ international shift is exacerbated by Targeted Allocation Money making salaries in the $250,000-$500,000 range – an area inhabited by a decent amount of veteran American and Canadian players – into what several sources described as a “dead zone.”

The case of Steven Beitashour is illustrative. The California-born, Iran international is an MLS lifer who played a key role in helping Toronto FC to its 2017 treble. He was out of contract at the end of the season and, according to a source, TFC was interested in bringing back the 31-year-old, but the club was concerned that it wouldn’t be able to fit him under the cap if it paid him near his 2017 salary of $264,000.

For Toronto, it made more sense to let Beitashour walk to LAFC and then use TAM to pay a higher salary to Dutch defender Gregory van der Wiel. Despite his higher salary, Toronto can use TAM to buy van der Wiel’s 2018 budget charge as low as $150,000, likely lower than the club would be able to get Beitashour’s cap hit using General Allocation Money.

This isn’t just a TAM issue, either. Things likely wouldn’t be much different if the league had just raised the salary cap by $4 million. The coaches, scouts, executives and agents spoken to said that any new money, regardless of how it was packaged, would probably have primarily gone to players from outside the league. Importing new talent is the best way to raise the overall quality of MLS and is often quicker and easier for individual teams than pulling off a trade for an impact player already in the league.

“I think you’d end up with roughly the exact same roles,” said the first source. “I think there would be some non-American or Canadian players in our league that would be playing here for less and some Americans and Canadians that would be playing in our league for more, but it’d be about the same.”

MLS limiting each team to eight, tradeable international slots is done with domestic players in mind, but even that regulation has limited reach. Players who obtain green cards don’t occupy international spots, regardless of where they’re originally from. As front offices have grown smarter and savvier, this process has been streamlined, according to multiple sources. Some teams are getting green cards for their international signings within 12-15 months of their arrival, leveraging deep pockets, smart lawyers and political connections to quickly turn “internationals” to “domestics” on their rosters.

All of that makes things harder for American and Canadian players to succeed in MLS. Players who were once full-time starters are entering platoons; former spot starters are becoming reserves; ex-reserves are disappearing from the league. This winter’s MLS free-agent class is feeling this acutely, with longtime contributors like Ricardo Clark, Brad Evans and Sean Franklin taking months to find new homes.

Why young domestic players are struggling for playing time

From a short-term perspective, this isn’t necessarily a problem. Despite its potential flaws, TAM has unquestionably raised the level of play in MLS. The league doesn’t exist for the American or Canadian player to thrive – it exists, as all sports leagues do, to deliver a product that best attracts fans and their dollars. In short, there lies Major League Soccer’s answer.  If MLS owners think the best way to grow the league is to continue to sign talented international players, then they should move forward accordingly.

From a long-term perspective, things get trickier, especially when it comes to young U.S. national team prospects.

On one hand, the shift away from domestic players and towards a higher quality league can be thought of as a positive for the U.S. and Canadian national teams. It’s not like the most important players are losing their jobs. Michael Bradley and Jozy Altidore will still start and star for their club teams. A better product around them should only raise their level.

Brett Davis-USA TODAY Sports

Brett Davis-USA TODAY Sports

It should work similarly for players further down the depth charts, younger guys like Jordan Morris, Kellyn Acosta, Paul Arriola, Samuel Piette and Jonathan Osorio. They carry a bit more risk of losing playing time to international signings than Bradley or Altidore, but the competition they face in training and games will be heightened. Some will sink, but those who swim will be better for it. Their respective national teams will likely lose out on a late-bloomer or two, but, on the whole, the thinking goes, they’d improve.

The competition may benefit players who have already cracked the lineup, but what will it do for the kids who haven’t yet broken in? There’s already a dearth of young, homegrown attackers in MLS, with Real Salt Lake’s Brooks Lennon, Vancouver’s Alphonso Davies and former Montreal winger Ballou Tabla the only American or Canadian attackers under the age of 21 to earn significant playing time in 2017. Young domestic players have always and will always have to compete for time, but as more money gets spent on young international players, it becomes even less likely that they’ll earn regular minutes.

In no way is that good for the U.S. or Canadian national teams, and it runs counter to the millions that MLS owners are pouring into their academies.

But there’s no impetus for it to change, either. Take Atlanta’s Andrew Carleton as an example. The 17-year-old winger is widely considered one of the top prospects in the U.S. youth national team system and starred for the Americans at the 2017 U-17 World Cup. He’s a big-time talent, but he’s not as highly-touted as Atlanta teammates Barco, Miguel Almiron or Tito Villalba. Atlanta manager Tata Martino is in the business of winning matches. Why would he regularly play someone who’s probably a lesser player over his prized South American attacking trio? He likely wouldn’t.

How will Carleton become better than Barco, Almiron or Villalba if he can’t get the MLS minutes he needs to improve? How will he and others like him hit their full potential unless they get a chance to make mistakes and grow? They likely won’t – at least not in MLS.

“The players coming in are worth $500,000, minimum. They’re going to play over the 18-year-old American and Canadian on nearly every team,” said the first source. “The teams where you’re still going to see players getting the chances are the teams that aren’t spending that money.”

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Of course, it works just like that in Germany, France and Spain, and their talented young players don’t seem to have any issue breaking into first-teams. It doesn’t need to be said that the U.S. and Canada aren’t Germany, France or Spain. The youth national teams in North America are indeed improving, but they don’t yet have the critical mass of talented young players needed to ensure that a sizable number will break into MLS first-teams.

“Even though some teams are producing some quality players, there’s such a massive gap in the years and the guys that are coming through that it’s not like some of these other countries and clubs where it’s just like, this kid’s 22, he’s gone. This kid’s 21, he’s gone, and then that 17- and 18-year-old are just pipelined up,” said a second high-ranking club official. “It’s difficult on a lot of levels.”

If the pipeline from MLS academies to first-team minutes doesn’t start flowing more freely, the sources agreed it’ll be a negative for American and Canadian soccer and a real blackmark on the league’s development system.

Is that what MLS wants?

Can’t have it all

The short answer, of course, is no. Listen to commissioner Don Garber on the subject, and it’s clear that MLS wants it all: To be a league of choice that attracts top stars from all over the world while grooming and developing homegrown talent, ideally for the U.S. and Canadian national teams.

That’s admirable, but considering the league’s current trajectory, it isn't quite realistic. If enough money is put into the system and teams continue building top-class facilities and attracting big crowds, MLS will continue improving.

But unless measures are put into place to ensure that young domestic players get minutes, it will be difficult for the league’s homegrown talent to flourish. Perhaps one day, the U.S. and Canada will have enough talented young players that a subset will regularly earn playing time over seven-figure signings. Until then, however, they’ll likely need a bit of an assist to get on the field.

There are measures MLS can enact to do just that. The league doesn’t need to look further than Liga MX, for an example. It was reported late in 2017 that the Mexican top flight was considering bringing back a rule requiring each of its clubs to play young Mexicans a minimum number of minutes. Dubbed the “20/11” rule, the mandate, first in place from 2005-2011, required every Liga MX team to play Mexican players under the age of 20 years, 11 months at least 1,000 combined minutes every Apertura and Clausura season. Teams that didn’t comply were docked three points.

Mexico isn’t the only country where such a rule has been in place. Venezuela has an even stronger example, with every first-division club required to play at least one U-20 domestic player in every league match. For cup matches, they’re forced to play a U-18 domestic player. The rule has drawn praise from Venezuelan national team and club coaches and has helped develop a wave of talent that includes Atlanta star Josef Martinez and young guns like NYCFC’s Yangel Herrera and RSL’s Jefferson Savarino.

The sources were intrigued by those sorts of rules, but several cautioned that they may not be right for MLS. A few advocated for positive reinforcement – say, rewarding teams that play young domestic players instead of punishing those that don’t. They said that an idea along those lines has been bandied about in MLS meetings in recent years, though talk hasn’t progressed to serious stages and that it would be a difficult measure to pass.

“If the goal is to sort of reel things in and put some other rules in place in terms of the amount of young Americans you have to have on your roster, the amount of American and Canadian players you have to play, that’s a tough sell to some owners and general managers and teams,” said the second source. “The product might have to take a step back in order to get that going.”

As MLS continues to add expansion teams and increase player spending, conversations about how the league’s growth will affect American and Canadian players will become increasingly important. There was no consensus among sources whether the league should push on with its current trajectory or if it should do more to ensure American and Canadian players receive playing time, but nearly all agreed on this: The league must have a clear idea of how it wants to proceed.

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